Those dollars continue to circulate, contributing to a functional dollar economy. Those bitcoins don't, so we don't have a functional bitcoin economy.

At some point, after the last central bank and Buffet bought bitcoin reserves, it will stop appreciating in value. Then it can start to circulate.

But what bitcoin owner is going to be willing to sell up and lock in their losses? They'll keep HODLing to the end, with only the occasional sale (to someone else in the ever-shrinking circle of people who care about bitcoin) to meet immediate needs.